TLAC AND RISK-WEIGHTS TOP REGULATORY CONCERNS: ROUND TABLE

摘要

Santiago Fernandez de Lis, chief economist of financial systems and regulation at BBVA: The introduction of the new ratio for Total Loss Absorption Capacity [TLAC] - as well as its European equivalent, Minimum Required Eligible Liabilities - is probably the most important forthcoming change in international financial regulation. With the objective of eliminating implicit taxpayer support, TLAC will affect in a fundamental way the funding structure of banks and how they interact with investors. It will introduce loss-absorbing features in subordinated and senior debt, the amount of which will be regulated and monitored by the authorities. Market discipline will play a key role, rewarding banks with a more resilient business model.